Accelerating rooftop solar adoption in the GCC
Although the GCC has been making major investments on utility-scale solar projects, the focus is quickly shifting to solar rooftop for residential and commercial applications. Experts speaking at the UME Solar Rooftop last month concurred that while challenges still exist, the potential is enormous
Utilities Middle East organised its first roundtable that brought together senior players and experts on solar rooftop. Discussions were centered on the opportunities and challenges within the GCC rooftop solar space, with key insights on the state of the industry, bankability of projects, innovations and the industry’s future. Panelists at the roundtable discussion, held at the ITP Media Group headquarters, included Ivano Iannelli - CEO of Dubai Carbon, Dr. Eng Waddah Ghanem Al Hashmi, senior director, sustainability, operational and business excellence at ENOC, Mario Farina, solar projects director at Etihad ESCO, Michal Pavlicek, area sales manager (Global) at ABB, and Ketan Lahoti, Sales & Marketing Manager in Renewables-Solar at ABB.
State of the solar rooftop industry in UAE
Ivano: The Dubai Electricity and Water Authority (DEWA) has proved to be a trend setter when it comes to solar. This is because every time DEWA takes a step forward in the solar space it has had a ripples effect whether this is utility scale solar or distributed solar such as solar rooftop. Over the past few years, we have seen the price drop by 50% in the residential rooftop space, which is making the sub-sector more commercialised and investment-ready because at those prices the return on investments are almost guaranteed. Recently DEWA launched the 5000 villa Hatta projects through Etihad ESCO, yet again prices have dropped, as a result rooftop solar at the moment in the UAE is commercially viable to the point that return on investment is often even within the fourth year space and allows for repeatability across every application.
Mario: What Ivano was saying is totally true, and he has played a very important role in the development of the market. As Etihad ESCO, we have proved our expertise in in the rooftop and retrofitting areas in Abu Dhabi and Dubai under the Shams Dubai programme. We are now studying ways to streamline procedures. We are already very close to achieving 70% of our production compared to consumption by 2020. These of course are thanks to the good leadership that we have. And the critical part that I am seeing in the market is the lack of sufficient financing, but this is improving. We are also seeing improvements in the legislation. These improvements are positive indicators and help to give us a sense on where the sector is headed.
Integrating rooftop solar, ENOC’s experience
Dr. Waddah: We started mainly in two areas, one of them is the DLPP in Jebel Ali where we have about 300 solar PV panels on the roof which is about 1000 square meters and we’re certainly lucky because of the actual configuration of that particular plant is that we have a big warehouse so we can eventually replace all these panels to meet our annual increased energy consumption. Whatever is remaining we are bringing to the grid.
We have already launched the first fully solar powered retail station in the region. We plan to make all our retail stations solar powered. Initially, we had issues with retrofitting the older stations due to the weight of these solar panels that weigh about 16kgs per square meter.
Now with the newer technology, we are getting solar panels around 3-4 kilos per square meter, which means that we can probably fit it on to the old canopies because the canopies are civil structures which need to carry the panel’s weight about 10 plus kilograms per meter square. So now with the lighter panels it is much easier for us to do the retrofitting.
The international perspective
Michal: ABB has invested a lot into the photovoltaic programme in Dubai. In 2016, we built a 315 kilowatt system on our roof, which is covering up to 40% of our building consumption. We have invested something around half a million dollar and we see that the payback period is now around five years, so we are on track.
So if you look at Europe, in countries like Germany, Italy, France where we have made massive rooftop solar installations that all sustainable, any investor putting their money in such installations is already getting a reasonable payback period. Here in Dubai it’s even better because the average solar irradiance is on such a high level that the sustainability of the rooftop projects in Dubai and the region of GCC countries is excellent.
Now, from our perspective because we are a manufacturer, our aim is to bring the right products in to the market in order to support the energy needs. We have been working with the latest standards and certification processes to make everything smooth here. We focus on the flexibility of the inverters so that any project that is going to use our technology is able to fit any rooftop installations needs because very often there are different orientations (like west-east), or there might be some windows or chimneys at the roofs which are not allowing the optimal DC design.
Therefore, we are developing products that are able to work with wide input voltage range and usually have multiple MPPT. The AC side is always designed with an aim to meet the local standards in order to be able to connect to the local grid.
The next level is that we are now integrating digitalisation. ABB is digitalising products following the industry 4.0. We are now providing the inverters with new digital technologies inside which allows the customers to reduce operational and service cost because we can provide them with the functions like remote FW update or remote service support. That means even without going onsite we can monitor the inverters and understand where the issue is. Together with this, we offer our customers the free lessons to understand the performance of the solar power plant.
In parallel, we are proposing one of the advanced technologies, like the higher DC voltage 1500 volt, which is not designated for rooftop due to the higher DC voltage, but primarily for the ground mounted projects. Of course there are cases like some concrete buildings or big water tanks where on the rooftops we can make such installation. Such innovations will help to work out further cost reduction again.
Ketan: In Dubai, we are seeing that DEWA is moving very well in terms of regulations for solar energy. And then, yes, we are also in the business of EV chargers, we are already doing well in Europe and we are anticipating that Dubai is again going to be a driver for our EV business.
Existing barriers to solar rooftop adoption
Mario: The financial sector has not fully appreciated the potential of solar rooftop. Unlike in other countries in Europe for example where solar projects implementation are greatly supported by the banks and financial organisations. If we are able to involve banks in Dubai, I think the market can speed up the development. We at Etihad ESCO along with DEWA are helping to accelerate awareness through various events.
Ivano: No, it’s just a matter of maturity. For example, I have tried the rooftop solar on my house for roughly the past four years. I’ve tried to get all of the facility management companies to come and make an assessment. The price that was asked of me was under 30% of the prevalent value of the energy produced. So obviously I’m not going to waste the economic impact on a facility management company just because of their brand or just because they cannot assess the value or the requirements. There must be a bigger market for more companies to get involved. Again, we have seen this in the O&M space of solar rooftop, every section of measurement rate on projects from small to medium to large, and the impact of cleaning on the actual revenue profile. We benchmarked it as a maximum of 15%, yet 15% is very costly. But if it goes above 15% you lose viability. So the O&M impact on the values generated from a solar plant would make the project unviable if they exceed 15% of the energy produced in economic value.
As a result we scanned the market left, right and center and we found exactly what kind of skillset is required. We are now trying to launch together with Etihad ESCO an initiative targeting a benchmark pricing of 3 UAE dirhams per panel for monthly cleaning cycles. This way we have achieved roughly 11% impact, below the 15%, but also we are telling the market hey, this is what you should be charging not more not less.
Building a solar rooftop culture
Dr. Waddah: 3 years ago we published our first energy resource management report and the energy resource management report we showcased a lot of the different projects that we put in place and we shared our successes. We had trained managers and technicians who were our champions of change within the organisation. That made everyone more proud of being part of this transformational change. That report was made public to share with other organisations that are doing it. Later, we published our first sustainability report, which we shared with our staff to appreciate what we were doing, and the payback was there for everyone to see. It takes many years to create that kind of transformation.
Security of investment in the ever-changing technology
Michal: Investment into PV technology is very safe and sustainable. In fact the technology is now being very proven – if you think about the solar modules, the modules existed since late 1960s, and in ‘70s and ‘80s the first tests were made to prove that the technology actually works and is able to produce energy. And since 2004-2006 the boom really started. Now if you think about the technology: the modules are made from very simple materials like Silicon, glass and aluminum. The mass production quality has more or less stabilised already. If you think about the inverters, it is quite a common product too, really, because it is based on the converter technology which has been on the market for more than 30 years. So we have a very, very long history of these technologies.
With string inverters in our Italian factory, we have done the first installations in 2008 and with central inverters even earlier. So again we have more than ten years of proven solar installations that are working and we have many products that have not had any service issues for over ten years. In that sense, I would say the investment in technology is very safe if you think about long term investment.
Of course, if you are in the GCC region where the temperature is rising to really high levels, we may expect that the requirement for the maintenance is slightly higher due to the high temperature. But the technology that we are developing is always designed also for the hot climates. We have very reliable cooling systems inside which are ensuring that the inverter is cooled properly and we also control the hot spot temperature of the electronics in order to extend the lifetime of the components.
Of course some service is sometimes needed because it’s electronics. It is not usual that one will go through change of component. It could be simply one inverter, but it’s usually a very minor service that is needed.
Strengthening local content
Ivano: In terms of localisation, the obvious focus area is on products that perform better in our climatic conditions. But in terms of localization per se, that is exactly what Shams Dubai is doing. So the requirements of Shams Dubai I would say are about 15% more stringent than European counterparts, they do look at specific factors such as resistance to wind, resistance to abrasion, cables and other elements, which is substantially in favor of the end user. In terms of other elements such as having communication platforms in Arabic and so on, these will be coming into place. For example, the 5000 villas manuals for cleaning are being established. HSC manuals are being developed, training programs are being consolidated in different languages not only Arabic but also Hindi to make sure that we look at the specific targets and are able to provide the service.
Mario: As Etihad ESCO, we are looking at the major sources of equipment, but honestly these are also of less impact in the local existing costs because it’s really structures that make a difference. So far we have a number of different installations, and it’s their ability to standardize and create simpler ways to install these panels on the rooftop that will make the difference.
Dr. Waddah: The Dubai government has decided that to encourage growth of particular businesses, big multinationals should help to develop local competencies, which is helping local companies to improve their technical score. While it is important to have in country value, the question is how much real development is taking place in terms of manufacturing and in terms of the research and development. We are seeing major shifts in policy, and these have the potential to democratise technologies around renewable energy to address the peculiar needs of the region, such as abrasive climate conditions. Questions about payback period and technology guarantees will linger on as technology continues to change rapidly, but it is high time that we bring banks into the bigger discussion.
Closing funding gaps
Dr. Waddah: I think, at a domestic level, manufacturers, technology providers and ESCO companies need to consider a tie-up with some of the local banks, which I believe will change the general perception of the financial institutions and the general public about rooftop solar.
Michal: For us as the manufacturer it’s not so simple to go to the bank and to ask for local support, because we’re a manufacturer of a component and not the installer, developer nor the investor. In fact we are working with our partners, installers and EPC companies through whom we are providing not only the technology, but all the technical support, findings and experiences of the region. The local companies, like EPCs, have the task to find financing.
Ivano: We have seen a lot of people complaining about not getting opportunities. So, it’s time for banks to adjust their lenses and see that there is a new product on the market. Banks are key enablers for rooftop solar adoption everywhere around the world.
Dr. Waddah: While we see good policies and implementation programmes already taking shape, I think it is very critical that a popular center of excellence is set up for the solar industry. You know, a Science City or a Center of Excellence for Research and Development on solar can be a very good initiative not only to champion solar adoption, but to also address all issues concerning the industry.
Ivano: The government is providing all the necessary support to derisk investments in solar rooftop projects. All it takes is the willingness by the financial institutions to walk the talk rather than just making lip service to the industry.
Mario: We continue to see Dubai leading the GCC market and as example to be followed by others around us. We are seeing that Saudi is a very big potential market for solar and retrofit business. We are basically establishing a joint venture to export the same model that we have in Dubai.
Michal: Storage is surely becoming a very important factor because the solar energy is free of charge everywhere and the only disadvantage is that we don’t have it at night. But, with energy storage, we are able to get 24 hour solar energy. In future we will have over production of energy, thanks to not only to solar and wind power generation but also other renewable energy sources. We see that the price of battery is getting more and more competitive, but it is still not as competitive that everybody can buy it. So, we are designing systems on modular based solutions where you can buy for example smaller battery storage, which can be later extended.